"I think the RBI has a knack of surprising markets, so I am expecting a rate cut tomorrow," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank. "But in either case, medium-term view for the rupee is weak. In case of a rate cut, it may be seen as a dip which can be used to buy," he said. The partially convertible rupee closed at 54.84/86 per dollar, weaker versus its previous close of 54.4850/4950. It dropped as low as 54.89 in late trade, its weakest since December 4. In the non-deliverable forwards market, the one-month contract was at 55.19 while the three-month was at 55.68.
In the onshore forwards, the one-month premium rose to 35 points from 32 points on Friday while the 1-year fell to 319.25 points from 323.75 points. In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.9250 with a total traded volume of $4.84 billion.